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Are external technology sourcing strategies substitutes or complements? The case of embodied versus disembodied technology acquisition


  • Cassiman, Bruno

    () (IESE Business School)

  • Veugelers, Reinhilde

    (Katholieke Universiteit Leuven)


This paper analyzes the choice between different external technology sourcing activities of a firm. On the one hand, the firm can acquire new technology which is embodied in personnel. On the other hand, the firm can obtain new technology disembodied through a licensing agreement or by outsourcing the technology development from an R&D contractor. Building on Cassiman and Veugelers (2006), we test whether embodied and disembodied technology acquisitions are complementary activities or rather behave as substitute technology acquisition alternatives. We find that while internal and external technology acquisition are complementary innovation activities, the actual choice of external technology sourcing between embodied or disembodied modes is substitutive for smaller firms. The evidence for larger firms suggests that different external technology sourcing activities are complementary, but in this case the results are suggestive although not strongly significant.

Suggested Citation

  • Cassiman, Bruno & Veugelers, Reinhilde, 2007. "Are external technology sourcing strategies substitutes or complements? The case of embodied versus disembodied technology acquisition," IESE Research Papers D/672, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0672

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    References listed on IDEAS

    1. Belderbos, Rene & Carree, Martin & Lokshin, Boris, 2004. "Cooperative R&D and firm performance," Research Policy, Elsevier, vol. 33(10), pages 1477-1492, December.
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    5. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
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    12. Acs, Zoltan J & Audretsch, David B, 1987. "Innovation, Market Structure, and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 567-574, November.
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    17. repec:crs:wpaper:9833 is not listed on IDEAS
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    Cited by:

    1. Cédric Schneider, 2009. "External knowledge sourcing: science, market and the value of patented inventions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 551-560.
    2. Elena Cefis, 2010. "The impact of M&A on technology sourcing strategies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(1), pages 27-51.
    3. Cefis, Elena & Marsili, Orietta, 2015. "Crossing the innovation threshold through mergers and acquisitions," Research Policy, Elsevier, vol. 44(3), pages 698-710.
    4. Scandura, Alessandra, 2016. "University–industry collaboration and firms’ R&D effort," Research Policy, Elsevier, vol. 45(9), pages 1907-1922.

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    Embodied & disembodied technology acquisition; complementarity; substitutability;

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